Public Finance: Tax Reform Writing Assignment

Public Finance Student Name: Tutor Name Course Date: 1. Would you move towards a consumption tax base, an income tax base, a combination? Tax policies are instruments utilized in levying taxes via imposition of different tariffs in order to apply the built policy…

Introduction

On the other hand, income, tax deals with income from labor and capital. This means that the higher the level of income earned the higher the amount of taxation imposed. This system tends to reduce tax burden among low income earners, hence discouraging people to work hard. This is because capital taxation tends to discouraged savings among the members of the society (McCluskey et al pp.4-6). Additionally, income tax tends to discourage investments innovation. This in turns contributes to lower standards of living. On the contrary, consumption tax base, tend to eliminate saving barriers, leading to a more robust economy (McCluskey et al pp.4-5). Therefore, based on the above discussion, I would, prefer the consumption tax base having in mind that it is an indirect tax that people do not feel pitch of paying it. In addition, their benefit outweighs those of income tax based system (McCluskey et al, pp.4-5). 2. How do your proposals promote economic efficiency? Technical analyst asserts that, it is better to pay taxes when you spend it rather than when one makes it. This is because it helps at creating a level playing field, when properly constructed. For example, some necessities may be tax exempt or levied at a lower rate. In above connection, expenditure tax tends to bring underground economies to surface where everyone gets taxed. (McCluskey et al pp.4-5). ...

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